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Volatility continues Wednesday with stocks coming off their morning highs to close mixed on the session. The Dow ($INDU) gained 30.23 points to a level of 9,802.14. The S&P 500 ($SPX) added 1.03 points to 1,046.50. The Nasdaq ($COMPQ) gave up 1.80 points to 2,055.52. Volume was moderate on the session with the NYSE trading 1.35 billion shares and the Naz turning over 2.23 billion shares. Market breadth was mixed with the Big Board seeing winners outpace losers by a 16-to-14 margin, but the Naz seeing decliners ahead of advancers by a 17-to-11 margin.

Stocks got off to a solid start Wednesday ahead of the FOMC statement at 2:15 pm EST. After the statement, stocks moved even higher, but this was short lived and the bears took control the last hour of trading. Economic news was mixed this morning with several employment related releases and the ISM Non-Mfg. Index released. Earnings reports form Kraft (KFT) and Comcast (CMCSA) did little to help their shares. After the bell, tech giant Cisco (CSCO) reported results and this could impact the start of trading Thursday.

The FOMC released a statement this afternoon that was little changed. The committee left the Fed funds rate unchanged and did not change their statement that rates would be left low for an "extended period" of time. Many were afraid the Fed would make comments that would remove the "extended" part of the statement. This might seem like trivial, but traders are listening closely for any signs that the Fed is going to start easing its accommodative policies.

Traders are also keenly focused on the jobs market, which continues to be a major concern. Friday will see the release of the October jobs report and traders got the Challenger report on job cuts and the ADP Employment release this morning. Job cut announcements fell to their lowest level since March 2008 at 55,679. This was down from 66,404 in September and well below the highs hit nearly a year ago when cuts reached above 200,000. The ADP report showed a decline of 203,000 private payrolls in October. This was an improvement from the 227,000 lost in September. Economists are looking for nonfarm payrolls to decline 175,000 as measured by the Labor department.

Shares of KFT and Comcast fell 3.2 percent and 3.1 percent respectively. KFT beat earnings expectations, but the fact revenues missed estimates and the company lowered its revenue forecast, pushed the stock lower. CMCSA beat earnings estimates by 8-cents a share at 33-cents. Revenues rose 3.0 percent, roughly in line with estimates. Despite this good news and the fact the stock has underperformed, shares moved lower. CMCSA shares have fallen nearly 13 percent in the same period the SPX has gained nearly 17 percent.

Networking giant Cisco announced strong earnings after the bell. CSCO beat earnings by 5-cents a share and exceeded revenues forecasts. The company also increased its stock buyback by $10 billion. In the regular session, CSCO shares rose 1.66 percent and have risen nearly 3 percent in the afterhours session at $24.

Jody Osborne
Senior Writer & Options Strategist
Optionetics.com ~ Your Options Education Site

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